Building momentum, one step at a time

Remember our rule of thumb: The more scared we are of a work or calling, the more sure we can be that we have to do it.

Resistance is experienced as fear; the degree of fear equates to the strength of Resistance. Therefore the more fear we feel about a specific enterprise, the more certain we can be that that enterprise is important to us and to the growth of our soul. That’s why we feel so much Resistance. If it meant nothing to us, there’d be no Resistance.

So if you’re paralyzed with fear, it’s a good sign. It shows you what you have to do.

When you’re first beginning the process of trying to take control of your finances, it can be totally overwhelming. In a world as complicated as ours, you find yourself having to juggle so many payments and fees and bills that it’s hard to know where to start.

But those who won’t care for their relatives, especially those in their own household, have denied the true faith. Such people are worse than unbelievers.

1 Timothy 5:8

The right way to start is by building your financial household first. Get to know what your core basic needs are and take care of them before you worry about anything else. Unfortunately, our complicated world has begun to confuse what a need is, so let me elaborate. Basic needs can be limited to three categories, which make up our roof in the picture below.

Healthy: The stuff that keeps your family alive and in reasonably good condition. This will include groceries and any medicine your family must take. (i.e. medicines for high blood pressure, diabetes, chronic depression, and the like. My acid-reflux medication wouldn’t make this list.) It might also include health insurance and/or co-pays.

Safe: The stuff that keeps you out of the elements and a reasonable amount of security. This will include your basic utility services (such as electricity and water) and your mortgage or rent. You might want to include the cost of necessary home repairs here as well. Don’t include every possible security measure, though. No amount of money can make you 100% secure.

Productive: The stuff that keeps you generating an income and ready to work. This will include transportation, which could be a car, a bus pass, or a good pair of shoes. It will probably also include a phone of some kind. It might include Internet access and an email account, a reliable cellular phone, and a reasonable clothing budget.

In all cases, the goal is to determine a reasonable number for your basic needs. Keep your numbers realistic, and don’t overload any of the categories with fluff you really can do without. For example, a young couple, just married, probably shouldn’t be spending $800 each month for groceries. A $200 per month cell phone contract with all the bells and whistles doesn’t qualify, either. And an Xbox will never be a necessary component to maintain productivity, no matter what anyone says.

Also, you’ll have to plan for different types of expenses.

A good example of a fixed cost expense would be your mortgage or rent. It’s a bill that’s due every month, and the amount owed doesn’t change very often, if at all. They’re predictable costs, and we wish that every core item was a fixed cost expense. Unfortunately, they’re not.

A variable cost expense would be things like gasoline for your car, or your electricity bill. Each month the amount spent on this item is going to change, either because the price of the good is constantly under change (gasoline), or your use varies (electricity). The is the simplest thing to do is put down a number that represents a high average for that item that month. It’s rare that you’ll find yourself at risk of going over.

Items like car maintenance or clothing would be a non-monthly expense. It’s a cost you know will be coming eventually, and you’re socking money away for it now so it won’t break the bank later. Use a savings account and put a little aside every month for each of these types of expenses.

Making sure that you’re covering your basic needs gives your budget a foundation to build on. It shows you that, no matter what else happens, you can keep the lights on, put food on the table, and stay employed. And if you’re not covering your needs, then it’s clearly time to improve your income. Without any margin, you’ll never be able to move beyond the struggle of living paycheck to paycheck. Every dollar earned above that core is the fuel to be used for reaching financial goals, but you have to build your financial house first.

The total you figure from your core needs can be used as a base number for your emergency fund. How many months can you live off of your savings when you’re just taking care of your basic needs? How many months do you want it to be?

An organization has only 100 percent of its resources and energies to spend. I have no idea what is meant when a manager says, “Let’s give it 110 percent!” There is a finite amount of energy, and the question is simple: is it directed toward internal, political issues, or toward external, client issues?

In the best companies I’ve worked with (or observed), the ratio is about 10/90. That is, 10 percent of the energy is abraded away internally, but 90 percent of it is directed toward sales, service, retention, market share, and so forth.

Alan Weiss, Million Dollar Coaching

There are times I have to leave the house and socialize with other people. As an introvert, that isn’t my natural state. Occasionally, it happens that I have to engage a group of people that I don’t really know (aka “strangers”), adding a level of emotional awkwardness. If I’m physically uncomfortable on top of that (i.e. my chair is at a weird angle, or personal space is limited, or I have a headache, etc.) where do you think the vast majority of my personal energy is focused?

Obviously, in those circumstances, most of my energy is going to go into coping with the situation. Very little will be reserved for making new acquaintances, smiling, or being friendly. I’ll want to use my wife and kids as a shelter, rather than be aware of how they’re feeling, and I’d be filling my time by checking the clock and eyeing the door.

And that’s just one event in a lifetime filled with thousands upon thousands of various such twists and turns. In each of those moments, I’ll only have a limited amount of resources to fall back on. Each day – each hour – each second only has so much energy to expend. That time I spend at work, or at church, or at home, or volunteering – how will I use it? Where will it be focused?

It’s important to understand that. It really does matter.

See, organizational energy is a byproduct of individual energy. We each contribute a portion of the greater whole when it comes to directing the energy of our places of business, or service, or worship. Whether you’re in a family of five, a church of fifty, or a company of twelve thousand, your focus makes a difference on the internal to external ratio of that organization.

Do an audit of the energy being spent by that sleepy church in the Midwest with a slowly shrinking membership. Are they busy trying to keep the people within the walls happy, or are they zealously focused on serving their neighbors and beyond? How have their members affected their ratio? It might be helpful to do an audit of each of them.

And when we’re criticizing the organizations we’re a part of, maybe we need to do an audit on ourselves.

I’m ramping up to coordinate my second Financial Peace University session for the year. The Spring session I had the privilege to coordinate was amazing, with 20 families completing the material and over a $100,000 turn around of their finances. It’s great to be able to be a part of a life-changing event for so many people.

If you’ve never taken Financial Peace University, I recommend it. It’s a great first step for families who are struggling with money issues and don’t know where to start. If you’re in the Tucson area, and you’re interested in joining a class, you’re all welcome to join mine.

We’ll be starting with a short orientation meeting for anyone interested in finding out more about FPU. We’ll be going over the class schedule and format, talk about what we expect from class members, how childcare will be handled, and answer any additional questions. That will happen on May 21st at 6:00 pm, and it shouldn’t last more than forty-five minutes.

The schedule breaks down as follows:

May 21 – Orientation

June 4 – Super Saving: Why you should save money, and why you need to start now.

June 11 – Relating With Money: Why families must work together to achieve financial goals.

June 25 – Cash Flow Planning: How to develop a monthly budget that really works.

July 2 – Dumping Debt: What myths we believe about debt, and how to become debt free.

July 9 – Buyer Beware: Why marketing is so powerful, and how to reduce it’s influence.

July 16 – The Role of Insurance: What insurance you need to have, and what to avoid.

July 23 – Retirement and College Planning: How to plan for the future.

July 30 – Real Estate and Mortgages: How to buy or sell a home.

August 6 – The Great Misunderstanding: Why you should live a generous life.

All meetings, including the orientation will be held at Saguaro Canyon Church at 10111 E Old Spanish Trail. Childcare is provided each time with a suggested donation.